Falling in love with solar: Green Mountain Power sets an ambitious plan for the future

Nov. 13, 2011

Green Mountain Power says it partnered with Shelburne Farms to build a solar orchard as a way of supporting local energy systems and demonstrating natural resource stewardship. The 530-panel project was commissioned in October 2010 and has a size of 149 kilowatts. The solar farm has produced 180,015 kilowatt-hours for one year of production. / Neil Dixon / Yankee Imaging LLC

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COLCHESTER — Green Mountain Power's recent drive to install lots of solar panels across Vermont was so successful it has people thinking that maybe solar energy is the state's Next Big Thing.

Then again, maybe not.

Mary Powell, president and CEO of the utility, said a goal established in November 2008 to have 10,000 solar panels erected in its service area within 1,000 days seemed pie in the sky. But soon, the arrays popped up across the Vermont countryside like dandelions in spring. By the time the 1,000 days were over, 26,000 new solar panels gleamed beneath the sun.

"We are really falling in love with the role solar can play," Powell said. The company she leads is the state's second-largest electric utility.

Roughly 26,000 solar panels is big, but not as big as some might think. A single typical solar array, such as one of several set up on Spear Street in South Burlington or off U.S. 7 in Vergennes, has perhaps 10 panels. So a group of 10 arrays would account for 100 of the 26,000 solar panels.

Many of the solar panels are on or near Green Mountain Power buildings in Berlin, Colchester, Montpelier and Westminster. Other relatively large solar fields are at Shelburne Farms in Shelburne, Camels Hump Middle School in Richmond and at the National Life headquarters in Montpelier.

Most of the solar installations are of much smaller scale, consisting of an array or two of 20 or 30 panels at homes or small businesses across the state.

All of this had Powell pleasantly surprised by how people are embracing solar energy. As Vermonters bought solar arrays, Powell said she remembers thinking, "Oh my God, it's working."

Even so, solar remains a small part of the Vermont's electric generation capacity. New England's lack of sunshine also means solar is unlikely to be the most reliable source of power. The cost of solar installations is falling, but tax breaks for such projects are evaporating. All this means that solar will remain only a relatively small player in Vermont's electric supply in the near future, Powell said.

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How solar fits in

Solar makes up only about 1 percent of the electricity generated in Vermont, said Andrew Perchlik, the Clean Energy Development Fund manager at the Vermont Department of Public Service.

Where solar comes in most handy is when Vermont utilities experience peak demand. That's usually in the summer, when heat waves inspire people to crank up their air conditioners.

During summertime peak power demand, Vermont utilities can buy a little less electricity generated by older, inefficient plants that use fossil fuels and purchase solar generated power instead.

It takes only a small amount of solar power to get utilities through the hump of peak summer demand. Green Mountain Power's peak demand was 344 megawatts last July. Roughly 5 of those megawatts came from solar sources. But that extra boost from solar sharply diminished the need to buy from dirty old plants, Powell said.

Electricity from solar generation is less expensive than purchasing from the older generating plants. Heat waves usually feature lots of sunshine, so solar power is reliable in hot weather. Plus, solar panels just sit there, are clean, soak up the hot sun and send electricity on its merry way to customers. Fossil fuel plants belch pollutants into the air. In hot weather, those pollutants undergo chemical changes in the sun to become dangerous ozone pollution.

That makes Green Mountain Power's ability to buy solar power even more compelling during summer heat waves, according to the utility.

"The big thing to keep in mind is solar's extreme value in the niche of peak demand," said Josh Castonguay, a fields operation leader for the power provider.

Solar energy isn't as useful for day-to-day energy demands. Solar panels don't work at night, of course, and they're not exactly electricity-producing blockbusters on overcast days, either. Given that, Powell conceded that solar is unlikely to become the principal source of Vermont's energy needs.

Moreover, demand for electricity is likely to continue rising, as more development occurs and as people continue to buy electricity-sucking gadgets such as cellphone charges and other electronic devices, and people turn to electric cars, Powell said.

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Embracing solar

The solar array at Shelburne Farms is among the largest in Green Mountain Power's service area, generating 149 kilowatt hours of electricity. The panels generate enough power to cover roughly 20 percent of Shelburne Farms' total use, said Alec Webb, president of Shelburne Farms.

Webb said solar power matches Shelburne Farms' philosophy of sustainability and environmental stewardship. There's room to install more solar arrays, and Shelburne Farms is contemplating an expansion of its solar capacity that one day could produce up to 80 percent of its electrical needs.

At National Life in Montpelier, the 418 solar panels installed in 2008 already are close to paying for themselves, said Tim Shea, vice president of facilities at the insurance company.

Federal and state tax incentives, grants, and money saved by the electrical generation means the arrays will pay for their $500,000 cost themselves within three years.

Costs and benefits

One reason people embrace solar, aside from its environmentally friendly reputation, are the incentives. Green Mountain Power, and more recently other utilities, pay customers 6 cents per kilowatt hour for the solar energy they produce.

Up-front costs for solar are falling fast, too. There's a debate in the power generation industry as to how big solar will become as technology prices fall. At some point, the cost of generating electricity from the sun could drop far enough to compete with electricity generation through fossil fuels, according to a column by Ezra Klein of the Washington Post.

Earlier this month, economist Paul Krugman wrote in the New York Times, "We are, or at least we should be, on the cusp of an energy transformation, driven by the rapidly falling cost of solar power."

Powell, Green Mountain Power's leader, said she sees an expanding role for solar power in Vermont, but it will never replace other sources of electricity. That's why the utility plans to stick with a wide variety of electricity sources, including wind, gas, wood, hydropower and other methods to meet the state's power demands, Powell said.

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If solar expands too rapidly, the economic benefits could be partly cancelled out. "One of the challenges is as costs are going down, a lot of the tax credits are going away, so out-of-pocket costs haven't gone down," Powell said.

The bottom line is, Green Mountain Power and other Vermont utilities might not need to substantially change their business plans as more customers install solar and are paid for generating electricity.

In other words, the 6 cents per kilowatt hour Green Mountain Power pays people who generate electricity through solar panels won't become a financial burden that would force the utility to rethink its financial models.

"We're a long way from that," Powell said.

That said, Green Mountain will continue to pursue aggressively new solar power, because the utility needs a diverse variety of power sources, Powell said. Solar inevitably will become a bigger player in the electric-generation field, and Green Mountain Power will have to stay with that trend, she added.

"We embrace future changes rather than fear them," she said.

There's an ambitious future ahead.

Green Mountain is in the process of merging with Rutland-based Central Vermont Public Service, the state's largest utility. Working with CVPS, Powell said, Green Mountain would turn Rutland into Vermont's first "solar city."

"Solar city means we will have more solar per capita than any other place in the state," she said. "I think we will amaze ourselves."